Unfortunately that a Merton residential lease is a wasting asset. As the lease term reduces so does the value of the property. The extent of this is taken for granted in the first few years due to the depreciation being disguised by increases in the Merton property market.Where your lease has approximately 90 years left, you need to start considering a lease extension. An important point to note is that it is desirable for lease extension to take place before the term of the existing lease dips below 80 years - otherwise a higher amount will be due. Most flat owners in Merton will be able to extend under the legislation; however a lawyer will be able to confirm whether you are eligibility. In some cases you may not qualify. There are also strict timetables and procedures to follow once the process has commenced and you will need to be guided by your conveyancing solicitor throughout the formalities.
It is generally accepted that a residential leasehold with over one hundred years unexpired lease term is worth approximately the same as a freehold. Where an additional ninety years added to any lease with more than 35 years left, the premises will be equivalent in value to a freehold for many years ahead.
| Lender | Requirement |
|---|---|
| Barnsley Building Society | 60 years from the date of the mortgage application subject to 35 years remaining at the end of the mortgage term. |
| Chelsea Building Society | 85 years from the date of completion of the mortgage. Please ensure that you explain the implications of a short term lease to the borrower. |
| Lloyds TSB Scotland | Minimum 70 years from the date of the mortgage. |
| Royal Bank of Scotland | Mortgage term plus 30 years. |
| Virgin | 85 years at the time of completion. If it's less, we require it to be extended on or before completion. |
Regardless of whether you are a tenant or a landlord in Merton,the lease extension lawyers that we work with will always be willing to discuss any residential leasehold matters and offer you the benefit of their experience and the close ties they enjoy with Merton valuers.
In the wake of 6 months of unsuccessful correspondence with the freeholder of her ground floor flat in Merton, Morgan started the lease extension process just as her lease was nearing the all-important eighty-year deadline. The legal work was finalised in October 2006. The freeholder’s costs were kept to an absolute minimum.
Last month we were approach by Ms A Walker , who bought a purpose-built apartment in Merton in June 2007. The dilemma was if we could estimate the price could be to prolong the lease by a further 90 years. Similar flats in Merton with a long lease were valued around £166,400. The mid-range ground rent payable was £60 invoiced yearly. The lease elapsed on 17 October 2080. Having 54 years as a residual term we approximated the premium to the freeholder to extend the lease to be within £32,300 and £37,400 plus professional charges.
Last January we were approach by Mr and Mrs. E Fournier , who owned a one bedroom flat in Merton in June 2007. The dilemma was if we could approximate the premium would likely be for a ninety year extension to my lease. Similar properties in Merton with 100 year plus lease were in the region of £225,400. The mid-range ground rent payable was £45 collected yearly. The lease finished on 18 November 2090. Taking into account 64 years as a residual term we estimated the premium to the landlord for the lease extension to be between £15,200 and £17,600 exclusive of professional charges.